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NAFCU President Fred Becker welcomed the NCUA Board's proposal Thursday to extend current Regulatory Flexibility measures to all federal credit unions and reaffirmed NAFCU's pledge to pursue opportunities for eliminating or streamlining rules.

NCUA's proposed rule would make current RegFlex provisions the standard for all federal credit unions. These include:

• an easing in rules on charitable contributions so all FCUs could make donations based on sound judgment and business practices;
• an adjustment in limits on non-member deposits to allow up to $3 million in such deposits (the current threshold is $1.5 million); and
• an extension of the amount of time federal credit unions have to occupy unimproved property from three years to six.

Agency staff the proposal would allow nearly all federal credit unions to take advantage of these expanded authorities without any restrictions.

The proposal would also amend related rules pertaining to investments. It would allow federal credit unions to extend maturities for zero-coupon investments up to 30 years. It would also extend the maturity limit for borrowing repurchase transactions and remove barriers preventing federal credit unions from purchasing commercial mortgage-related securities.

The board is also specifically requesting comments on whether it should extend RegFlex provisions on eligible obligations to all federal credit unions.

NCUA Chairman Debbie Matz said the proposed RegFlex changes will give credit unions more flexibility without threatening safety and soundness. But she cautioned credit unions to "walk, not run" in responding to proposed changes in investment rules. Staff said credit unions would need certain expertise to take advantage of the easing in investment rules.

Becker, while welcoming the proposed rule, said NAFCU will continue to seek reinstatement of RegFlex provisions regarding fixed assets and the personal guarantee for member business loans. Specifically, NAFCU is urging the agency to streamline the waiver process and review fixed assets no more than once a quarter. It also supports a blanket waiver for MBL transactions where there are multiple owners of real estate.

NCUA will accept comments on the proposed rule for 60 days following its publication in the Federal Register. NAFCU is preparing a Regulatory Alert for members.